Plunderous Malware Makes Off With Bags of BitCoins
The value of the virtual currency BitCoins has crashed recently due to a piece of malware designed to allow thieves to steal users' electronic loot. Security experts have urged caution in dealing with BitCoin, though this certainly isn't the first time the value of the virtual currency has fluctuated greatly.
06/20/11 11:10 AM PT
A new malware attack aimed at stealing BitCoin wallets is on the loose, according to information released by security firm Symantec. The attack has led to reports of at least one theft amounting to approximately US$500,000.
BitCoins are a form of virtual currency. The relatively unregulated method of trading that appeals to so many users comes with a downside -- unencrypted codes can lead to large security breaches, such as in the case of the malware exposed by Symantec.
Days after the attack was publicized, the value of BitCoins has fallen significantly.
"Infostealer.Coinbit," as the Trojan is known, targets a BitCoin user's wallet, then sends that information to the attacker's e-mail.
Analysts suggest that BitCoin users take steps to ensure their safety.
"Requiring user interaction -- such as entering some password, for example -- could improve security. This should be a mandatory change and wouldn't imply a change on the system itself, so [it] could be applied quickly," Luis Corrons, technical director of Panda Security, told TechNewsWorld.
Symantec did not respond to requests for comment.
Future of Currency?
Despite the hopes of many BitCoin users for a viable form of cloud currency, security concerns might change the way they operate since by nature it is difficult to regulate.
"BitCoin itself is not a business. It's a decentralized virtual currency. As such, it will be up to those who trade and create BitCoins to make any changes," Roel Schouwenberg, senior antivirus researcher at Kaspersky Lab, told TechNewsWorld.
Another concern is the instability of BitCoin as a currency. Even before the security breach, the value fluctuated greatly but could usually be found somewhere between $8 and $18. After the attack, however, a massive sell-off occurred and the price tanked to a low of under $2.
The value is rising slowly, but it could be a while before it's back up to pre-attack prices.
Not Simply Fraud
Politicians and analysts have security concerns about BitCoin beyond the online scamming world -- they're concerned that the accessibility of unregulated funds make purchases for illegal goods such as illicit drugs easier.
Websites such as Silk Road, which is often characterized as a digital black market, use BitCoin for payment methods. U.S. Senators Charles Schumer (D-NY) and Joe Manchin (D-W. Va) have written a letter to U.S. Attorney General Eric Holder expressing their concerns about the use of BitCoins to easily buy, sell and ship illegal drugs worldwide.
Still, BitCoin wallets will likely continue to have a place in the virtual world.
"It is pretty clear that there are many users willing to use a currency system that is not controlled by the state and their politicians, so I think that this BitCoin system or something similar has a place in the free market," said Corrons.
Once again, consumer vigilance is the key to staying safe.
"Overall, I don't see these attacks changing anything other than how careful people will be with their virtual wallet," said Schouwenberg.